This week in parcel, UPS announces its 2024 GRI, while FedEx announces the details of its GRI. The rate increases are softer than last year, but that only tells part of the story.
Meanwhile, fuel costs are on the rise for the eighth straight week.
Pay attention to the details in the 2024 FedEx GRI
FedEx has released most of the details in its 2024 general rate increase (GRI), but it hasn’t announced all of the potential surcharges.
The 5.9% average increase that will go into effect on January 1, 2024 is softer than it was in 2023, but there are similar themes when it comes to the services and fees most affected.
The GRI has closely followed inflation over the past few years, and this year is no exception. With the rate of inflation softening, so has this year’s GRI.
While the average rates won’t see as high an increase as in previous years, surcharges will. We also don’t know what Demand Surcharges will look like in 2024, with the current Demand Surcharges set to expire on January 14.
Our take: The story of this GRI is the surcharges. Shippers need to prepare for the additional Demand Surcharges, which will likely be announced later this year.
Read more here.
UPS announces its GRI, matching FedEx
Like its biggest competitor, UPS announced a 5.9% GRI. Unlike FedEx, whose rate increases begin on January 1, 2024, UPS’s new rates start on December 26, 2023.
The increase is softer than the 6.9% increase from last year, but, as with FedEx, several surcharges are coming this peak season which will be higher than last year. These surcharges, while not a part of the GRI, are a big source of revenue for the carriers. They will begin in October.
Although UPS is set to see an increase in overhead costs as a result of the new labor agreement with the Teamsters Union, it decided not to go higher than FedEx with its GRI to offset the costs.
UPS has not announced the full details of its 2024 GRI, nor has it announced when it will release these details.
Our take: The GRI is only part of the story. Stay tuned for TransImpact’s 2024 UPS GRI breakdown to get the full story. Sign up below to get it for free once it’s released.
Fuel prices increase for the eighth straight week
For the eighth straight week, diesel prices are on the rise. After rising 4.8 cents, diesel now costs $4.54 per gallon on average in the U.S. In total, the average cost of fuel has risen 73.4 cents.
Still, despite the eight-week run of increases, diesel is cheaper than it was at this time last year by 49.3 cents per gallon. The average price of gasoline is 13.2 cents more expensive than it was last year.
Our take: Fuel is another variable expense (just like some surcharges) that companies fail to budget for properly. Shippers need to keep an eye on fuel costs as we draw closer to peak season.
Read more here.